Thursday, June 30, 2011

Ron Paul is the Only candidate who wants to bring the troops home, end the federal reserve which is stealing money right out of your bank account, reduce the size of government and give power back to the people and defend the constitution. Ron Paul 2012.

Some of the videos were taken from the fantastic DVD "For Liberty" which you can watch online here:

Ron Paul 2012: Real Hope

For Liberty: How the Ron Paul Revolution Watered the Withered Tree of Liberty

Tuesday, June 28, 2011

Police have fired tear gas in running battles with stone-throwing youths in Athens, where a 48-hour general strike is being held against a parliamentary vote on tough austerity measures.

Thousands of protesters have gathered outside parliament in the capital where public transport has ground to a halt.

PM George Papandreou has said that only his 28bn-euro (£25bn) austerity plan would get Greece back on its feet.

If the package is not approved, Greece could run out of money within weeks.

Without a new plan in place, the EU and IMF say they will withhold 12bn euros of loans which Greece needs to repay debts due in mid-July.
'Declared war'

Monday's rally started peacefully, but escalated into running skirmishes on the fringes of the main demonstration.

Some protesters started throwing stones and bottles at the police in one corner of the central Syntagma Square, with police firing tear gas to keep protesters back.

Small fires appear to have been started by the protesters.

The general strike has halted most public services, banks are closed and hospitals are operating on skeleton staff.

Airports are shutting for hours at a time, with air traffic controllers walking out between 0800 and 1200 (0500-0900 GMT) and 1800 and 2200 (1500-1900 GMT). A number of flights were also cancelled at Athens international airport.

Trains, buses and ferries are also affected.

In Athens, the metro is the only form of public transport which will work "so as to allow Athenians to join the planned protests in the capital", metro drivers said.

More than 5,000 police officers were deployed in the centre of Athens as the protesters marched towards parliament.

Protesters have blockaded the port of Piraeus, near Athens, which links most Greek islands with the mainland.

"The situation that the workers are undergoing is tragic and we are near poverty levels," said Spyros Linardopoulos, a protester with the PAME union at the blockade.

"The government has declared war and to this war we will answer back with war."

The unions are angry that the government's austerity programme will impose taxes on those earning the minimum wage, following months of other cuts which have seen unemployment rise to more than 16%.

- Taxes will increase by 2.32bn euros this year, with additional taxes of 3.38bn euros in 2012, 152m euros in 2013 and 699m euros in 2014.
- A solidarity levy of between 1% and 5% of income will be levied on households to raise 1.38bn euros.
- The tax-free threshold for income tax will be lowered from 12,000 to 8,000 euros.
- There will be higher property taxes
- VAT rates are to rise: the 19% rate will increase to 23%, 11% becomes 13%, and 5.5% will increase to 6.5%.
- The VAT rate for restaurants and bars will rise to 23% from 13%.
- Luxury levies will be introduced on yachts, pools and cars.
- Some tax exemptions will be scrapped
- Excise taxes on fuel, cigarettes and alcohol will rise by one third.
- Special levies on profitable firms, high-value properties and people with high incomes will be introduced.
PUBLIC SECTOR CUTS

- The public sector wage bill will be cut by 770m euros in 2011, 600m euros in 2012, 448m euros in 2013, 300m euros in 2014 and 71m euros in 2015.
- Nominal public sector wages will be cut by 15%.
- Wages of employees of state-owned enterprises will be cut by 30% and there will be a cap on wages and bonuses.
- All temporary contracts for public sector workers will be terminated.
- Only one in 10 civil servants retiring this year will be replaced and only one in 5 in coming years.

SPENDING CUTS

- Defence spending will be cut by 200m euros in 2012, and by 333m euros each year from 2013 to 2015.
- Health spending will be cut by 310m euros this year and a further 1.81bn euros in 2012-2015, mainly by lowering regulated prices for drugs.
- Public investment will be cut by 850m euros this year.
- Subsidies for local government will be reduced.
- Education spending will be cut by closing or merging 1,976 schools.

CUTTING BENEFITS

- Social security will be cut by 1.09bn euros this year, 1.28bn euros in 2012, 1.03bn euros in 2013, 1.01bn euros in 2014 and 700m euros in 2015.
- There will be more means-testing and some benefits will be cut.
- The government hopes to collect more social security contributions by cracking down on evasion and undeclared work.
- The statutory retirement age will be raised to 65, 40 years of work will be needed for a full pension and benefits will be linked more closely to lifetime contributions.

PRIVATISATION

- The government aims to raise 50bn euros from privatisations by 2015, including:
- Selling stakes this year in the betting monopoly OPAP, the lender Hellenic Postbank, port operators Piraeus Port and Thessaloniki Port as well as Thessaloniki Water.
- It has agreed to sell 10% of Hellenic Telecom to Deutsche Telekom for about 400m euros.
- Next year, the government plans to sell stakes in Athens Water, refiner Hellenic Petroleum, electricity utility PPC, lender ATEbank as well as ports, airports, motorway concessions, state land and mining rights.
- It plans further sales to raise 7bn euros in 2013, 13bn euros in 2014 and 15bn euros in 2015.

Monday, June 27, 2011

C-SPAN interviewed 2012 Republican presidential candidate and Representative Ron Paul. He talked about his two previous presidential bids, the state of the Republican Party, the Obama administration, his years as a doctor and military service, and other topics.

When Ron Paul announced four years ago that he was running for president, the congressman from Texas had a tough time attracting attention.

Paul, known for his anti-government views, opposition to the Iraq, Afghan and Libyan conflicts and drive to get rid of the Federal Reserve, stayed in Washington to declare his candidacy for the 2008 Republican nomination on C-Span, the cable television station devoted to government proceedings. His entry earned a one-sentence mention near the end of a Washington Post political story, and little notice elsewhere.

Last month, his venue for announcing another presidential bid was an appearance on ABC’s “Good Morning America” -- a program with more than 4.5 million viewers. He spoke from a rally in New Hampshire, where hundreds of backers drawn to Paul’s message of shrinking government and limiting its reach cheered the 75-year-old great-grandfather.

“During the last campaign people weren’t too interested in what I was saying,” Paul said in an interview. “There’s some respect for it now.”

Paul, a former obstetrician who estimates he’s delivered about 4,000 babies, also has seen his clout grow within Congress, where during most of his 11 full terms he had little influence. This year, he ascended to the helm of the House subcommittee that oversees the Fed. Rand Paul, his son and a Tea-Party favorite who follows his father’s anti-tax, anti-debt politics, joined Paul in Washington in January as a Republican senator from Kentucky, elevating the family brand.

Straw Poll Win

At the Southern Republican Leadership Conference in New Orleans, an annual gathering of party activists that this month featured speeches by several White House aspirants, Paul won a June 18 presidential preference straw poll. The day before, he took the stage at the event to a thundering chant of “Ron Paul” from supporters. Minutes into his speech, several hundred began shouting “Kill the Fed.”

Paul looked on with a smile. “This is wonderful; this is where we have made our greatest stride,” he said. “It’s time we not only audit our Federal Reserve, but in due time get rid of the Federal Reserve.”

The heightened appeal of his efforts was evident in 2010, when the House cleared his legislation to require audits of the central bank’s interest-rate decisions. It was Paul’s ninth attempt at passing legislation to rein in the Fed. A watered- down version of Paul’s measure was included in the financial- regulation law enacted last year, and Paul has vowed to push for greater oversight.
Heightened Stature

“Anybody who ever thought Ron Paul was a joke was not paying attention,” said Charlie Black, a veteran political strategist who advised Republican presidential nominee John McCain in 2008. “His stature is elevated because his followers did play a big role in the Tea Party movement and the victories for Republicans in 2010.”

In the 2012 campaign, Paul said, rivals no longer dismiss him.

“In the debates last go-around, if I brought up monetary policy they literally would laugh or snicker,” he said. “I don’t think that’s there anymore because people are realizing the current system isn’t working that well.”

Rich Dad "Robert Kiyosaki" and his entire adviser team discuss how they have prepared for the coming depression:
- Year's supply of food
- Guns
- Gold & silver
- Cash on hand

They speak of the coming depression (inflationary or not it's going to happen), shutting down the credit card system, and higher taxes no matter what. Budget-cutting police forces promotes lawnessness.

What scares me now is these are not some local yocals on youtube speaking their wacky thoughts. Instead, these are calm, straight speaking, successful businessesmen in the know, telling us what they have done. We should take notice. They are prepared.

Central banks need to start raising interest rates to contain inflation and may have to act faster than in the past, the Bank for International Settlements said.

“Tighter global monetary policy is needed in order to contain inflation pressures and ward off financial stability risks,” the BIS said in its annual report published today in Basel, Switzerland. “Central banks may have to be prepared to raise policy rates at a faster pace than in previous tightening episodes.”

While policy makers in Asia and Latin America are already raising borrowing costs to damp price pressures, rates remain near record lows in the world’s largest developed economies. Central banks in the U.S., U.K. and Japan have signaled they intend to keep that stimulus in place for some time, with only the European Central Bank moving to gradually tighten credit as inflation risks increase.

“Global inflation pressures are rising rapidly as commodity prices soar and as the global recovery runs into capacity constraints,” said the BIS, which acts as a central bank for the world’s central banks. “These increased upside risks to inflation call for higher policy rates.”
Risk of Distortions

The BIS said that in “some advanced economies” policy tightening still needs to be balanced against the “vulnerabilities” associated with private and public sector balance-sheet adjustment and financial-sector fragility.

At the same time, “undue delay in the normalization of the monetary policy stance entails the risk of creating serious financial market distortions, the postponement of deleveraging and the misallocation of resources,” it said. Furthermore, a “timely tightening” of policy in both emerging-market and advanced economies will be needed “to preserve a low-inflation environment globally and reinforce central banks’ inflation- fighting credibility.”

The BIS said central banks should also reduce the size of their balance sheets, though it would be “dangerous” to cut them “too rapidly or too indiscriminately.”
Balance Sheets

In response to the financial crisis, the Fed and the Bank of England “sharply” increased their total assets from about 8 percent of gross domestic product to just below 20 percent, according to the BIS. The ECB expanded its assets from 13 percent of GDP to more than 20 percent. In emerging markets, central bank balance sheets “grew more gradually over the past decade,” the BIS said.

“Balance sheet policies have supported the global economy through a very difficult crisis,” it said. “However, the balance sheets are now exposed to greater risks -- namely interest-rate risk, exchange-rate risk and credit risk -- that could lead to financial losses.”

The BIS urged governments to pursue fiscal consolidation, saying the biggest risk is “doing too little too late rather than doing too much too soon.” In Europe, policy makers must fix the region’s debt crisis “once and for all,” it said.

‘No Shortcut’

“Nowhere is the link between fiscal sustainability and financial health more apparent than in parts of Europe today,” Caruana said. “There is no easy way out, no shortcut, no painless solution.”

The BIS also warned that a failure of the U.S. to tackle its budget deficit could become a source of instability, with potentially “far-reaching ramifications for the global economy” should a rapid depreciation of the dollar result.

“The current ability of the United States to easily finance its deficit cannot be taken for granted,” the report said.

We are confronting a crisis, all right, but it is not a Greek crisis, unless uncertainty as to the date of that country's de facto default counts as a crisis.

If the insolvency of that tiny country were the world's only problem, it would be stretching the word "crisis" to apply it to the travails and insolvency of that tiny country.

What we have come to call the Greek crisis is, first, an international banking crisis. Like Lehman Brothers, Greece is definitely not too big to fail. It is too interconnected to fail, too interconnected to the international banking system, too interconnected to the political ambitions of those who have spent decades replacing the system of nation states with a united Europe.

Start with Greek banks, which hold €70 billion ($99.3 billion) of their government's sovereign debt. The Economist estimates that if Greek banks were required to recognize the fact that markets are valuing Greek government debt at about half the value assigned to this paper on their books, shareholders would be wiped out and the banks would have to scramble to raise substantial new capital. Depositors would scramble to get their money out, and the European Central Bank would have to torture its rules to find a way to continue accepting Greek bank IOUs in return for the cash needed to maintain the liquidity of the Greek banking system.

Other financial institutions would also find life more difficult. Many of Germany's under-capitalized banks would be hard hit if they were forced to recognize that their books are in good part works of fiction, with IOUs of Greece and its banks and businesses recorded at values that have no relation to their true worth.

German banks are not alone in their predicament: The rating agencies are already expressing concern about the exposure of three French banks and some 29 Italian banks, and the governor of the Bank of England has called the problems of overly indebted euro-zone countries the "most serious and immediate risk" to the U.K. financial sector. It is also obvious that we have no clear idea of the exposure of U.S. money-market funds to Greece's insolvency, or of insurers—remember AIG, anyone? That's why $51 billion has been pulled out of those funds in recent weeks by nervous investors, why America's banks have become reluctant to lend to their European counterparts, and why the Fed is asking U.S. banks about their exposure, including credit default swaps written on European banks.

Greece's problem has also revealed another crisis—a crisis of governance. The Tower of Babel that is euroland governance is collapsing. Markets have gone from puzzled to incredulous and on to near-panic as Herman Van Rompuy says one thing, José Manuel Barroso another, Jean-Claude Trichet another, Angela Merkel still another. Their failure to sing from the same hymn sheet is damaging—no, destroying—any confidence markets might once have had in the competence of the euro-zone governing class.

On to the next, and related crisis, a crisis of German identity. The current generation of German voters is no longer certain it must pay any price to subsume its nation in a wider Europe lest its nation's economic power stir fears of a rebirth of the "German problem." Germans remember the decades-long price they paid to bring woebegone East Germany closer to the economic standard of the West, and are not sure they want to pay a similar price to bring southern Europe up to German standards of economic performance, if that is even possible. A Germany that wants once again to be a "normal" country is not a nation that will uncomplainingly consent to the perpetual southern shift of its income and wealth, which is the only alternative to default other than devaluation, unavailable to euro-zone countries.

What we are calling the Greek crisis is also a crisis of structural economic dysfunction. Illiquidity and insolvency are merely the symptoms of the deeper problem affecting a broad swathe of the euro-zone. Excessive debt is not the result of profligacy alone. It is also the result of demography and of a lack of economic growth. The ageing of the European population, and the increasing proportion that consists of immigrants not enamored of Western values and free markets, present problems Europe has yet to confront. Nor has it coped with the stifling effect on innovation and growth of the systematic protection of inefficient private- and public-sector institutions. Illiquidity and even insolvency can be cured with money; a lack of international competitiveness in countries unable to devalue requires the stronger medicine of structural reform.

But enough whining. In Philip Roth's wonderful novel "Portnoy's Complaint," a book closer to reality than the ledgers of many banks, a psychiatrist listens to the protagonist's complaints about his life for more than 200 pages, and then remarks, "Shall we begin?"

Let's. If we accept that the politicians have decreed that immediate default is off the table, we can, indeed, must:

• force the banks to recognize that much of what they count as assets aren't, and to recapitalize, even if this slows lending and growth in the short term;

• recognize the need to speak to markets with one voice;

• admit that perpetual dependence on the generosity of Germany is not a sustainable policy;

• remove incentive-numbing high taxes and barriers to innovation in order to generate the growth and tax revenues to support more sensibly constructed welfare states.

Friday, June 24, 2011

Among the facts that the Federal Reserve would rather you didn’t know is that at the height of the financial turmoil in 2008, when average Americans were just beginning to suffer, the institution was passing out sweetheart deals to protect the powerful and well-connected. Among the beneficiaries were foreign banks, Wall Street giants and even the company that then owned MSNBC.

Recently, my House subcommittee on domestic monetary policy held a hearing to examine information disclosed by the Federal Reserve about its bailout lending during the 2008 financial crisis - disclosure that was required by the Dodd-Frank Act and the Freedom of Information Act.

These Federal Reserve records, made available to the public on Dec. 1, 2010, and on March 31 provided a look at thousands of transactions and trillions of dollars in lending by the Federal Reserve.

The importance of this hearing cannot be overstated.

The conduct of the Fed and the operations of its lending facilities, especially during the most critical periods of the financial crisis, require intensive oversight and the utmost transparency.

Had it not been for the actions of grass-roots activists intent on holding the Fed accountable, none of this information would have seen the light of day. The Fed not only protested these transparency efforts every step of the way, but also predicted financial disaster if details on the recipients of those funds were released.

Several months after the disclosures, the only disaster is the continuing refusal of the White House and Congress to rein in an out-of-control Fed and exercise effective oversight of its monetary policy.

In fact, as I pointed out during the hearing, much of the data we received in these disclosures were heavily edited by the Fed.

Like the majority of Americans who support my push for full transparency for the Fed’s monetary policy, I want to know the whole story about the Fed’s actions leading up to the crisis and beyond - not just the parts it chooses to disclose. Countless lives have been ruined by the havoc created by the Fed’s loose monetary policy, and Congress owes it to those Americans to prevent another financial crisis from happening.

Not holding the Federal Reserve accountable for its actions is the epitome of negligence. Unlike the story sold to the American people in 2008 - that the economy would grind to a halt without trillions of dollars in bailouts - the truth has turned out to be very different.

And let me tell you - Americans will be outraged when they see what the Fed has done.

For example, money was lent to major firms such as Goldman Sachs at rates as low as 0.01 percent, essentially a free loan to the politically well-connected. Non-banks such as General Electric and Verizon Communications got Fed loans. Banks partly owned by the Chinese government received billions in loans.

We now know that at the peak of the crisis, the Fed was providing nearly 90 percent of its discount window loans to foreign banks and even lent billions of dollars to a bank partially owned by the Bank of Libya.

Those actions warrant further investigation into how the Fed operates.

It is little wonder the Fed so ardently opposed the grass-roots audit movement as it was duping the American people into bailing out its Wall Street cronies and sending billions of dollars overseas.

While everyday Americans suffered through the Great Recession, Wall Street and politically connected insiders benefited from their ties to receive a reprieve from the consequences of their bad decisions - and Congress stood by and did nothing.

Given what we know now, we cannot afford to waste any more time and must take action right away to permanently lift the Fed’s veil of secrecy.

I have reintroduced my Audit the Fed legislation, the Federal Reserve Transparency Act, to require full transparency and accountability from the Federal Reserve, and my subcommittee will continue to hold hearings on the Fed’s policies. It is long past overdue that Americans learned the truth about what happens inside the central bank that holds absolute power over the value of their money, the health of the economy and the strength of the nation.Rep. Ron Paul is a Texas Republican.

Thursday, June 23, 2011

European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks.

“On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

Trichet, who chairs the ESRB, said officials did not discuss the situation in Greece, where the government is trying to stave off a default as European governments prepare a second bailout for the nation. The EU is trying to avoid a repeat of the financial crisis that followed the 2008 collapse of Lehman Brothers Holdings Inc. (LEHMQ) and resulted in European governments setting aside more than $5 trillion to support banks.

BNP Paribas (BNP) SA, France’s biggest bank, and rivals Societe Generale (GLE) SA and Credit Agricole SA (ACA), may have their credit ratings cut by Moody’s Investors Service because of their investments in Greece, the ratings company said on June 15. German banks could also be at risk from contagion, Fitch Ratings said last month.

“The most serious threat to financial stability in the EU stems from the interplay between the vulnerabilities of public finances in certain EU member states and the banking system,” Trichet said. There are “potential contagion effects across the union and beyond.”

In his 12 terms in Congress, Ron Paul has waged many lonely crusades. Before he was a Tea Party standard bearer and a master of the online money bomb, the man known as “Dr. No” was a libertarian icon who regularly bucked his party’s budgets and preached isolationism* against military intervention when his peers were girding for war. But while he’s nurtured a devoted band of supporters, the Texas Republican has been a non-factor in his two prior bids for the White House. Paul is hoping his third bid for the presidency will be different. With the rise of the Tea Party, the center of gravity of the Republican base has shifted toward Paul, particularly on foreign policy. And while the political punditry has again written him off, his supporters believe Paul has the fund-raising might and grassroots army to make a credible challenge for the nomination in 2012.

On June 17, Paul spoke to TIME by phone from New Orleans, where he won the straw poll at the Republican Leadership Conference. A trimmed and lightly edited transcript follows:

Why do you want to be President?

To straighten out the mess that this country is in. To give this country more peace, more prosperity, a sound currency and a lot more security.

Four years ago, you demonstrated your fund-raising prowess and your appeal to a segment of fervent fans. But you weren’t a top contender for the nomination. Why do you expect to do better this time?

Because the country is a completely different country than it was four years ago. People have come to realize that you can’t continue these wars, and both sides now are putting a lot of pressure on the President to back off, especially when it comes to Libya. Also, people are now looking at the Federal Reserve as being a major contributor, if not the entire cause, of financial bubbles and these troubles we have. These are the kind of things I’ve been talking about for 20 to 30 years.

In addition to saving money abroad, what policies would you prescribe to spur economic growth here at home?

I would work real hard on the tax code. I want the Federal Reserve to quit creating money out of thin air, because that distorts the economy. That’s central economic planning by manipulating interest rates. Money should come from savings. Where are our savings? They’re overseas. A lot of our companies made money overseas and don’t want to bring it home and get taxed 30% or 40%. They’ve already been taxed overseas. Corporate taxes should be as close to zero as possible.

Then you need to have regulatory relief. The more trouble we get into, the more regulations they add on. They say the lack of regulations was why we had our crisis. Well, the regulations should be placed on the Federal Reserve, not on the businessman. You have to allow the liquidation of debt and the mal-investment. We should have allowed bankruptcies to occur rather than save weak companies.
Would you vote to raise the debt limit if the deal to do so contained spending reductions equal to or exceeding the $2.4 trillion it would take to raise the borrowing limit through 2012?

The promises to cut spending, which is supposed to be the temptation to vote for the debt increase, I think is a trick. Are they going to do it this year? Next year? Or is it going to be a 10-year program? There is no value to promises to make cuts in the future. In the 1980s they had a tax increase and it was agreed that for every dollar of increased taxes, there would be two dollars of spending cuts. What happened to the deficit in the 1980s? It still exploded.

You’re known for voting your ideology. Are you willing to compromise this time around to enhance your chances of winning the nomination?

That would be like crossing your fingers as you take an oath of office. Instead of compromising, I work with coalitions. Some of my best groups have been working with progressive Democrats. They understand civil liberties and they understand war, and many of them, believe it or not, think deficits are bad. They like transparency of the Fed. I think working with coalitions without sacrificing any principle is the way to go. If you say now is the time to compromise, you’re also saying your oath of office is worth about 50%.
What would a Ron Paul presidency look like?

There would be changes on Day 1. I’d do everything conceivable to trade with [foreign countries] rather than intimidating them. I’d try to relieve some of the tension. I certainly wouldn’t have warships in the Black Sea trying to stir up a new Cold War with the Russians. That’s crazy. The rest of it, you have to get a consensus, get Congress to pass laws. You could back off on regulations. The federal register is big enough. That would be a signal to the business people: Wow, he doesn’t like taxes. You could do a lot to change the atmosphere, the intimidation that Big Government places on our business community.

Monday, June 20, 2011

Known as "the indignant", the protesters are angry about mass unemployment

Tens of thousands of protesters have taken to the streets of Madrid and other Spanish cities in a mass march against austerity measures, social spending cuts and unemployment.

Youth activists dubbed "the indignant" recently started a three-week sit-in in Madrid to pressure the government.

The rallying slogan of protesters is A Europe for its Citizens.

They fear that the Euro-pact, which is intended to improve eurozone competitiveness, will mean more cuts.

No leadership

On Sunday, the protesters streamed in from all sides of the capital, chanting, banging drums and waving placards. Some walked for as long as five hours - and by early afternoon a vast crowd had converged close to parliament.

The slogans and chants are the same: against mass unemployment and social spending cuts, and in opposition to European-wide austerity measures.

"It's important to take to the streets because a series of measures are being taken by those in power - like the Euro-pact, for example - making Europe belong to the bankers and not the people," one woman protester said.

"We are all against bankers, money and capital - and against corruption and the misuse of public money. That's why we're angry," said a male demonstrator.

There is no leadership to this protest movement - it has no structure - but it does appear to have widespread social support. There are now calls to seize the momentum and stage a nationwide general strike.

In Spain, youth unemployment is more than 43%. The economic crisis has left more than a million families without a single wage-earner.

Sunday, June 19, 2011

UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default.

Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.

Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.

Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.

In its interim management statement, published in April, Barclays reported a wholesale exposure to Spain of £6.4bn, compared with £7.2bn last June, while its exposure to Italy has fallen by more than £100m.

One source said it was “inevitable” that British banks would look to minimise their potential losses in the event the eurozone crisis were to get worse. “Everyone wants to ensure that they are not badly affected by the crisis,” said one bank executive.

Moves by stronger banks to cut back their lending to weaker banks is reminiscent of the build-up to the financial crisis in 2008, when the refusal of banks to lend to one another led to a seizing-up of the markets that eventually led to the collapse of several major banks and taxpayer bail-outs of many more.

European Central Bank President Jean-Claude Trichet on Sunday raised concern about widening global imbalances after the financial crisis, calling them one of the main challenges for the global economy.

Global imbalances were blamed for contributing to and aggravating the financial crisis and recession that struck the global economy in 2008 and 2009.

"A concern is that after some partial reduction induced by the crisis, global imbalances are starting to widen again," Trichet said according to a speech text for a ceremony, in which he was awarded the Global Economy Prize 2011 by the Institute for World Economy in the northern German city of Kiel.

Such imbalances raise challenges for international monetary and fiscal cooperation, Trichet said, referring to global imbalances as "one of the main challenges facing the global economy and the world community."

GOVERNANCE

The euro zone is struggling with a severe debt crisis, facing its toughest test as it tries to prevent Greece defaulting.

The ECB is at odds with governments, including Germany, over a rescue package for Greece, and in particular over the terms of any moves to draw private sector lenders into the bailout operation.

Paul was edged by one vote at this same event last year, but this straw poll success has become de rigeur at such gatherings. And, just as they have at recent CPACs, Paul's backers in the crowd here let out loud cheers when the results were announced from the stage while the regular Republicans in the audience booed the Libertarian-leaning Texas congressman's success.

The more notable result was Huntsman's second place. The former ambassador was slated to speak to the confab, but backed out, citing a cold. That the little-known and pragmatic Huntsman would finish between Paul and Bachmann — each of whom enjoy a passionate following among more ideological activists — is surprising.

Rumors circulated here that Huntsman campaign had paid for supporters to attend the conference and a spokesman for the candidate, Tim MIller, didn't deny that they had.

"Not commenting on internal strategy," said Miller, adding: "The result demonstrates that young conservatives are responding to his record of success in Utah, willingness to take the debt problem seriously, and foreign policy message,"

The GOP's effective frontrunner Mitt Romney narrowly defeated Paul here last year but got only 74 votes this time. Romney didn't show up this year. Neither did Tim Pawlenty, who won just 18 votes.

The International Monetary Fund has warned that the risks facing the world economy have increased.

The fund said it was concerned about the continuing Greek debt crisis, the arguments over US deficit plans and the need to curb growth in Asia.

But it said it expected global growth to remain on track, though it lowered its forecasts for the US and UK.

The IMF predicted that the world economy would grow at a rate of 4.3% in 2011 and 4.5% in 2012.

The fund called for greater political leadership in dealing with the eurozone debt crisis and the budget crisis in the US.

"You cannot afford to have a world economy where these important decisions are postponed, because you're really playing with fire," said Jose Vinals, director of the IMF monetary and capital markets department.

The IMF's latest forecasts came as it updated its assessments of financial stability, country finances and the global economy. Its last review was in April.
Greek debt

The fund warned that the continuing Greek debt crisis could destabilise the global financial system.

Many analysts believe Greece will not be able to pay back all the money it has borrowed.

"I don't think there is a question over whether Greece is going to default, it is just a question of whether it is an orderly or disorderly one," says George Magnus, senior economic adviser at UBS.

The IMF warned that if Greece was unable to pay its debts, other countries such as Spain or Portugal may also be affected.

European banks which lent money to these countries would in turn lose out.

"In a serious market event, a shock could be transmitted beyond the eurozone", warned the IMF's financial stability report.

It called on the leaders of European governments to implement long-term policies to prevent further problems.

At the same time, the IMF warned that European banks had not yet built up sufficient capital to withstand a further economic shock.

"Markets may become disorderly if political developments derail momentum on fiscal consolidation and financial repair," the fund warned.

Friday, June 17, 2011

The United States of America may potentially be on the precipice of a Greek-style debt crisis within a few years, and our economy is increasingly looking like it may be at risk of entering another recession - and the Financial Crisis 2.0 could make the Great Recession look tame. Simply put, the Fed and Treasury have bloated their balance sheets to such grotesque levels to fight the deflationary forces sparked in the economy as a result of the housing collapse that there will be no more temporary "smoke-and-mirrors" fiscal and monetary options to circumvent another downturn.

Certainly, the Fed will likely give QE3...QE4...QE5, a shot if the economy becomes completely unglued, but similar to what has occurred in Japan for the last 20 years, it will not work. We have already seen what Mr. Bernanke's money printing in the form of QE2 has wrought - it has robbed the middle class blind, while benefitting the entrenched corporate, banking, and political elite, along with wealthy Americans. The vast majority of Americans do not have sufficient financial assets such as bond, stock, commodity and hedge fund portfolios to offset the rise in food and energy prices that Bernanke has unleashed on the country due to his policy of Dollar devaluation through money printing.

The entire burden of a falling Dollar as a result of QE2 and the United States' exploding debt has been placed on the middle and working classes, while the elite have benefitted from rising prices for financial assets. It is a scam. Furthermore, it hasn't provided one iota of benefit for the vast majority of American citizens. The unemployment rate continues to hover at 9.1% and very likely could hit double digits by next year.

Furthermore, home prices hit a new low in May. This is the one asset that matters most to the majority of Americans, and things are getting worse. The creator of the Case-Shiller Home Price Index, Robert Shiller, recently said that he was optimistic that home prices could fall for the next 20 years. In all likelihood, there will be no economic recovery whatsoever when the dust settles. The bailouts, federal deficit spending, and quantitative easing programs that were enacted to attempt to reflate asset prices and spark the job market will be viewed by historians as failures. The entire Keynesian orgy's real result is likely to be an even more devastating financial collapse.

The toxic debt that was held by the private sector before the crisis has now been transferred to sovereign balance sheets as well as those of global central banks. Furthermore, many private corporations have taken advantage of the Fed's historically low interest rate policy to lever-up their balance sheets once again. These facts when combined with the moral hazard that we have introduced into our economic system as a result of the bailouts (corporate socialism), similar problems in most of the developed world, and an unprecedentedly interconnected global economy have set the stage for a potential systemic meltdown.

All of this could have been averted if we had taken heed of Dr. Ron Paul's warnings years ago. This man has been fighting with absolute integrity and honesty for the values that this country was founded on for the last 30 years - sound money, balanced budgets, free markets, non-interventionist foreign policy and civil liberties. Most every other GOP Presidential candidate is an Establishment panderer who is beholden to entrenched special interests. Why should we trust another Establishment politician after being subjected to the lies of George W. Bush and Barack Obama, not to mention nearly every other politician in Washington D.C.?

Alan Greenspan, former Federal Reserve chairman, said a default by Greece is “almost certain” and could help drive the U.S. economy into recession.

“The problem you have is that it’s extremely unlikely the political system will work” in a way that solves Greece’s crisis, Greenspan, 85, said in an interview today with Charlie Rose in New York. “The chances of Greece not defaulting are very small.”

Greek government bonds slumped, pushing the yield on the two-year note above 30 percent for the first time, as Prime Minister George Papandreou’s failure to win support for more austerity fueled speculation the European country will fail to meet its obligations. More than 20,000 people protested in Athens this week against wage reductions and tax increases, with police using tear gas on crowds and strikes paralyzing ports, banks, hospitals and state-run companies.

The chances of Greece defaulting are “so high that you almost have to say there’s no way out,” said Greenspan, who ran the central bank from 1987 to 2006. That may leave some U.S. banks “up against the wall.”

Greece’s debt crisis has the potential to push the U.S. into another recession, Greenspan said. Without the Greek issue, “the probability is quite low” of a U.S. recession, he said.

“There’s no momentum in the system that suggests to me that we are about to go into a double-dip,” Greenspan said.

Economic data released today show confidence in the expansion eroding among Americans and businesses, as unemployment remains above 9 percent.

U.S. Debt Limit

The U.S. recovery is being hindered by apprehension among businesses over the long-term outlook, and there’s nothing more for Fed policy makers to do, Greenspan said.

U.S. lawmakers are wrangling over spending cuts and budget reforms as they seek an agreement to increase the $14.3 trillion debt limit before Aug. 2, the date on which the Treasury Department said it will have exhausted its borrowing authority.

The U.S. debt issue is becoming “horrendously dangerous,” said Greenspan, who added he doubts lawmakers have another year or two to solve it.

It's time to stand up. Anonymous is the idea that we are all one sharing the same idea of freedom and in that idea we are many. WE ARE LEGION! It's time to take the power back!

Just Released! ANONYMOUS declares war on the system! JOIN THE RESISTANCE!

Anonymous: Resistance Begins NOW. System Failure: Imminent.

ANONYMOUS: "THE PLAN" IS NOW LIVE. PHASE 1: INITIATED. WAR AGAINST THE SYSTEM.

The hacker group Anonymous is calling out Federal Reserve Chairman Ben Bernanke to resign. Anonymous has called for public protests beginning on June 14th, continuing "until Federal Reserve Chairman Ben Bernanke steps down." To make their case, they have presented a list of recent scandalous Federal Reserve actions.

The “hacktivist” group, Anonymous, posted a mission statement to Pastebin on June 12 describing the reasoning behind their planned and upcoming attack on official Malaysian government websites. Anonymous warned, “We fear that if you make further decisions to take away human freedom, we [will be] obligated to act fast and have no mercy.”

Threats to Social Order Increasingly Hit Cities, Bringing Iron-Fist Response

BEIJING—A wave of violent unrest in urban areas of China over the past three weeks is testing the Communist Party's efforts to maintain control over an increasingly complex and fractious society, forcing it to repeatedly deploy its massive security forces to contain public anger over economic and political grievances.

The simultaneous challenge to social order in several cities from the industrial north to the export-oriented south represents a new threat for China's leaders in the politically sensitive run-up to a once-a-decade leadership change next year, even though for now the violence doesn't appear to be coordinated.

In the latest disturbance, armed police were struggling to restore order in a manufacturing town in southern China Monday after deploying tear gas and armored vehicles against hundreds of migrant workers who overturned police cars, smashed windows and torched government buildings there the night before.

The protests, which began Friday night in Zengcheng, in the southern province of Guangdong, followed serious rioting in another city in central China last week, plus bomb attacks on government facilities in two other cities in the past three weeks, and ethnic unrest in the northern region of Inner Mongolia last month.

Antigovernment protests have become increasingly common in China in recent years, according to the government's own figures, but they have been mainly confined to rural areas, often where farmers have been thrown off their land by property developers and local officials.

The latest unrest, by contrast, involves violent protests from individuals and large crowds in China's cities, where public anger is growing over issues including corruption and police abuses.

There is no evidence to suggest the recent violence is part of a coordinated movement—the party's greatest fear—nor do the events threaten its grip on power given the strength of China's security apparatus, and its booming economy, analysts say. They are nonetheless troubling for China's government which, unnerved by unrest in the Arab world, has detained dozens of dissidents since appeals for a "Jasmine Revolution" in China began circulating online in February. The Mideast uprisings so far haven't inspired similar mass protests in China.

China’s inflation pressures have yet to be contained by four interest-rate increases since September, underscoring the danger of any extended policy pause as bad weather threatens to further drive up food costs.

The central bank yesterday increased banks’ reserve requirements to drain cash from the economy after consumer prices rose 5.5 percent in May, the biggest gain since 2008. Inflation may reach 6 percent this month, according to banks from Societe Generale SA to UBS AG.

Wen aims to tame prices and sustain growth to maintain social stability, with the premier noting in March that inflation, corruption, and the gap between rich and poor could “affect the government’s hold on power.”

Signs of social unrest have include clashes involving street vendors in Zengcheng, Guangdong, this month and riots last month in Inner Mongolia. The government has also detained activists after calls for so-called “jasmine” rallies, inspired by revolts in the Middle East and North Africa.

Friday, June 10, 2011

Western science has had remarkable success in explaining the functioning of the material world, but when it comes to the inner world of the mind, it has very little to say. And when it comes to consciousness itself, science falls curiously silent. There is nothing in physics, chemistry, biology, or any other science that can account for our having an interior world. In a strange way, scientists would be much happier if minds did not exist. Yet without minds there would be no science.
This ever-present paradox may be pushing Western science into what Thomas Kuhn called a paradigm shift--a fundamental change in worldview.

This process begins when the prevalent paradigm encounters an anomaly -- an observation that the current worldview can't explain. As far as the today's scientific paradigm is concerned, consciousness is certainly one big anomaly. It is the most obvious fact of life: the fact that we are aware and experience an internal world of images, sensations, thoughts, and feelings. Yet there is nothing more difficult to explain. It is easier to explain how the universe evolved from the Big Bang to human beings than it is to explain why any of us should ever have a single inner experience. How does all that electro-chemical activity in the physical matter of the brain ever give rise to conscious experience? Why doesn't it all just go on in the dark?

The initial response to an anomaly is often simply to ignore it. This is indeed how the scientific world has responded to the anomaly of consciousness. And for seemingly sound reasons.
First, consciousness cannot be observed in the way that material objects can. It cannot be weighed, measured, or otherwise pinned down. Second, science has sought to arrive at universal objective truths that are independent of any particular observer's viewpoint or state of mind. To this end they have deliberately avoided subjective considerations. And third, there seemed no need to consider it; the functioning of the universe could be explained without having to explore the troublesome subject of consciousness.

However, developments in several fields are now showing that consciousness cannot be so easily sidelined. Quantum physics suggests that, at the atomic level, the act of observation affects the reality that is observed. In medicine, a person's state of mind can have significant effects on the body's ability to heal itself. And as neurophysiologists deepen their understanding of brain function questions about the nature of consciousness naturally raise their head.

When the anomaly can no longer be ignored, the common reaction is to attempt to explain it within the current paradigm. Some believe that a deeper understanding of brain chemistry will provide the answers; perhaps consciousness resides in the action of neuropeptides. Others look to quantum physics; the minute microtubules found inside nerve cells could create quantum effects that might somehow contribute to consciousness. Some explore computing theory and believe that consciousness emerges from the complexity of the brain's processing. Others find sources of hope in chaos theory.

Yet whatever ideas are put forward, one thorny question remains: How can something as immaterial as consciousness ever arise from something as unconscious as matter?
If the anomaly persists, despite all attempts to explain it, then maybe the fundamental assumptions of the prevailing worldview need to be questioned. This is what Copernicus did when confronted with the perplexing motion of the planets. He challenged the geocentric worldview, showing that if the sun, not the earth, was at the center, then the movements of the planets began to make sense. But people don't easily let go of cherished assumptions. Even when, 70 years later, the discoveries of Galileo and Kepler confirmed Copernicus's proposal, the establishment was loath to accept the new model. Only when Newton formulated his laws of motion, providing a mathematical explanation of the planets' paths, did the new paradigm start gaining wider acceptance.

The continued failure of our attempts to account for consciousness suggests that we too should question our basic assumptions. The current scientific worldview holds that the material world--the world of space, time and matter -- is the primary reality. It is therefore assumed that the internal world of mind must somehow emerge from the world of matter. But if this assumption is getting us nowhere, perhaps we should consider alternatives.

One alternative that is gaining increasing attention is the view that the capacity for experience is not itself a product of the brain. This is not to say that the brain is not responsible for what we experience -- there is ample evidence for a strong correlation between what goes on in the brain and what goes on in the mind -- only that the brain is not responsible for experience itself. Instead, the capacity for consciousness is an inherent quality of life itself.

In this model, consciousness is like the light in a film projector. The film needs the light in order for an image to appear, but it does not create the light. In a similar way, the brain creates the images, thoughts, feelings and other experiences of which we are aware, but awareness itself is already present.

All that we have discovered about the correlations between the brain and experience still holds true. This is usually the case with a paradigm shift; the new includes the old. But it also resolves the anomaly that the old could not explain. In this case, we no longer need scratch our heads wondering how the brain generates the capacity for experience.

This proposal is so contrary to the current paradigm, that die-hard materialists easily ridicule and dismiss it. But we should not forget the bishops of Galileo's time who refused to look through his telescope because they knew his discovery was impossible.

'Coalition of the Willing' is a collaborative animated film and web-based event about an online war against global warming in a 'post Copenhagen' world.

'Coalition of the Willing' has been Directed and produced by Knife Party, written by Tim Rayner and crafted by a network of 24 artists from around the world using varied and eclectic film making techniques. Collaborators include some of the world's top moving image talent, such as Decoy, World Leaders and Parasol Island.

The film offers a response to the major problem of our time: how to galvanize and enlist the global publics in the fight against global warming. This optimistic and principled film explores how we could use new Internet technologies to leverage the powers of activists, experts, and ordinary citizens in collaborative ventures to combat climate change. Through analyses of swarm activity and social revolution, 'Coalition of the Willing' makes a compelling case for the new online activism and explains how to hand the fight against global warming to the people.

Wednesday, June 8, 2011

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." --Thomas Jefferson to John Taylor, 1816.

"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs." --Thomas Jefferson to Thomas Cooper, 1814.

"The art and mystery of banks... is established on the principle that 'private debts are a public blessing.' That the evidences of those private debts, called bank notes, become active capital, and aliment the whole commerce, manufactures, and agriculture of the United States. Here are a set of people, for instance, who have bestowed on us the great blessing of running in our debt about two hundred millions of dollars, without our knowing who they are, where they are, or what property they have to pay this debt when called on."

"The treasury, lacking confidence in the country, delivered itself bound hand and foot to bold and bankrupt adventurers and bankers pretending to have money, whom it could have crushed at any moment…These jugglers were at the feet of government. For it was not, any confidence in their frothy bubbles, but the lack of all other money, which induced…people to take their paper" -- Thomas Jefferson, October 1815 letter to (former) Treasury Secretary, Albert Gallatin.

"I own it to be my opinion, that good will arise from the destruction of our credit. I see nothing else which can restrain our disposition to luxury, and to the change of those manners which alone can preserve republican government. As it is impossible to prevent credit, the best way would be to cure its ill effects by giving an instantaneous recovery to the creditor. This would be reducing purchases on credit to purchases for ready money. A man would then see a prison painted on everything he wished, but had not ready money to pay for." --Thomas Jefferson to Archibald Stuart, 1786.

"If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air... We are warranted, then, in affirming that this parody on the principle of 'a public debt being a public blessing,' and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper." --Thomas Jefferson to John W. Eppes, 1813.

"The Bank of the United States is one of the most deadly hostilities existing, against the principles and form of our Constitution. An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?" --Thomas Jefferson to Albert Gallatin, 1803.

Regulating Banking Institutions

"The principle of rotation... in the body of [bank] directors... breaks in upon the espirit de corps so apt to prevail in permanent bodies; it gives a chance for the public eye penetrating into the sanctuary of those proceedings and practices, which the avarice of the directors may introduce for their personal emolument, and which the resentments of excluded directors, or the honesty of those duly admitted, might betray to the public; and it gives an opportunity at the end of the year, or at other periods, of correcting a choice, which on trial, proves to have been unfortunate." --Thomas Jefferson to Albert Gallatin, 1803.

Paper Speculation

"A spirit... of gambling in our public paper has seized on too many of our citizens, and we fear it will check our commerce, arts, manufactures, and agriculture, unless stopped." --Thomas Jefferson to William Carmichael, 1791.

"Our public credit is good, but the abundance of paper has produced a spirit of gambling in the funds, which has laid up our ships at the wharves as too slow instruments of profit, and has even disarmed the hand of the tailor of his needle and thimble. They say the evil will cure itself. I wish it may; but I have rarely seen a gamester cured, even by the disasters of his vocation." --Thomas Jefferson to Gouverneur Morris, 1791.

Emerging-market economies, growing almost three times faster than their developed counterparts, need to speed spending cuts and interest-rate increases as they fight inflation and overheating, the World Bank said.

The Washington-based institution lowered its growth forecast for the world economy this year to 3.2 percent from a January estimate of 3.3 percent, to reflect Japan’s earthquake and political unrest in the Middle East and North Africa. The World Bank left unchanged a prediction for a global rebound to 3.6 percent in 2012.

Developing countries “have put the crisis-fighting stage of the recovery behind them,” Andrew Burns, the World Bank’s manager of global macroeconomics, told reporters yesterday. “They now need to be reorienting themselves towards establishing the conditions that are going to allow them to have strong growth in years to come.”

While developed nations contend with high unemployment and Europe’s debt crisis, many emerging economies with strong expansions are yet to remove fiscal stimulus enacted to cushion the global recession, according to the World Bank. Real interest rates are low or negative in many countries even as policy makers from India to Peru raise borrowing costs, according to the bank.

Policy makers “will need to make fuller use of all the tools at their disposal to keep inflation under control,” the World Bank said. “While the more unstable capital inflows that characterized the third quarter of 2010 have abated, many of the underlying conditions that attracted those flows remain in place.”

The World Bank also estimated that domestic food prices in developing countries may increase this year and next, even if international prices decline.

Risks to the global economy also include continued turmoil in Arab countries, where civil unrest has lifted oil prices. Higher energy costs could also boost food prices further, the bank said.

Tuesday, June 7, 2011

Cameron Sinclair demonstrates how passionate designers and architects can respond to world housing crises. He unveils his TED Prize wish for a network to improve global living standards through collaborative design.

The same people who brought you Wikileaks are back, and this time, they've created a virtual currency called Bitcoin that could destabilize the entire global financial system. Bitcoin is an open-source virtual currency generated by a computer algorithm that is completely beyond the reach of financial intermediaries, central banks and national tax collectors. Bitcoins could be used to purchase anything, at any time, from anyone in the world, in a transaction process that it is almost completely frictionless. Yes, that's right, the hacktivists now have a virtual currency that's untraceable, unhackable, and completely Anonymous.

And that's where things start to get interesting. Veteran tech guru Jason Calacanis recently called Bitcoin the most dangerous open source project he's ever seen. TIME suggested that Bitcoin might be able to bring national governments and global financial institutions to their knees. You see, Bitcoin is as much a political statement as it is a virtual currency. If you think there's a shadow banking system now, wait a few more months. The political part is that, unlike other virtual currencies like Facebook Credits (used to buy virtual sock puppets for your friends), Bitcoins are globally transferrable across borders, making them the perfect instrument to finance any cause or any activity -- even if it's banned by a sovereign government.

You don't need a banking or trading account to buy and trade Bitcoins - all you need is a laptop. They're like bearer bonds combined with the uber-privacy of a Swiss bank account, mixed together with a hacker secret sauce that stores them as 1's and 0's on your computer. They're "regulated" (to use the term lightly) by distributed computers around the world. Most significantly, Bitcoins can not be frozen or blocked or taxed or seized.

-Bitcoin is the first digital currency to be distributed and was created by Satoshi Nakamoto
-Bitcoin is based on entirely open source software
-Decentralized to ensure security and freedom of use
-Encryption provides basic security functions, like ensuring that bitcoins can only be spent by the person who owns them and never more than once
-No bank is required for bitcoin distribution–anyone can create, buy, sell or accept bitcoins as a payment method for tangible or intangible goods and services
-Bitcoin creation is called ‘mining’–the network creates and distributes a batch of new bitcoins approximately six times per hour at random to somebody running the software with the “generate coins” option selected
-Miners offer competitive fees to facilitate bitcoin transactions, ensuring that transaction fees stay low

Monday, June 6, 2011

In today's Europe, the people are no longer in control. Instead, politicians have become slaves to financial institutions and the markets. We are partly to blame -- and changes are urgently needed to nurse European democracy back to health.

We are doing well. In fact, we're doing splendidly. The economy is booming, with 1.5 percent growth in the first quarter. We are as prosperous as we were before the crisis, which has finally been overcome. Congratulations are in order for everyone.

The banks, Deutsche Bank above all, deserve particular congratulations. In the first quarter, it earned €3.5 billion ($5.1 billion) in pretax profits in its core business, and by the end of the year the bank will likely report a record €10 billion in pretax profits, its best results ever. That number is expected to rise to €11 billion or even €12 billion in two or three years.

Less than three years after the peak of the crisis, it seems as if it never happened. That is true of the economy, but it also true of us as economic subjects. But is that all we are?

No, we are also citizens and participants in a democratic society. As such, we have no reason to be celebrating. Instead, we ought to be sad and outraged. Democracy, after all, is not doing splendidly, or even well. It is gradually becoming a casualty of the financial crisis.
Rage Directed at Politicians

Trouble is brewing all over Europe. Young people with little hope for the future are protesting in Spain. In France, 1.4 million copies were sold of a manifesto titled "Be Outraged." Young Frenchmen and -women are devising utopias that extend well beyond civil society because they no longer expect anything from it. A deep depression has descended upon Greece, combined with a rage directed at politicians and the rest of Europe.

In Germany, this is what politicians are hearing from their citizens today: "You spent billions to rescue the banks, and now I'm supposed to be footing the bill? Forget it!" Hardly anyone is willing to put up with their politicians any more. And German leaders have lost support -- and some of their own legitimacy.

They seem helpless, unable to come to grips with the euro crisis. They meet in Brussels, and they talk, argue and adopt resolutions, and yet nothing improves. Greece isn't getting out of its hole, Ireland and Portugal are teetering on the brink, and Spain and Italy are heavily indebted to a dangerous degree. And no politician is providing leadership.

And then there were the lies. Jean-Claude Juncker, the prime minister of Luxembourg, had his spokesman deny that a meeting of European Union finance ministers on the Greek crisis was taking place, even though that meeting was in fact taking place. It wasn't the kind of lie that frequently crops up in politics: the broken campaign promise. Rather, it was more crass type of untruth: the denial of a reality. Juncker no longer had the courage to speak the truth. He was guided by fear of the financial markets. His lie was a capitulation of politics.

Things Will Have to Change

This is what is so disturbing about the current situation: the fact that politicians seem so helpless and powerless. They have been given a new master, and it's not us, the people, who tend to intervene in milder ways. Rather, it's the ruthless financial markets. The markets drive politicians even further into anxiety, weakness, incapacity and lies. Those who govern us are now being governed by the banks. That's the situation.

We could decide that we don't care because the economic figures are so good. But that would mean we are happy to play the role of the economic subject, to invest and spend money, all the while abandoning the original promise of democracy. Or we can say: We refuse to relinquish our role and political masters. But if that's our decision, things will have to change.

How has this happened? What are the consequences? And how do we extricate ourselves from this situation?

Essential Readings

In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill [world's reserve currency] is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value.
What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the "confidence" people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so;
Of course, they [banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts.
-Modern Money Mechanics

I believe in limited government. I believe that government should be limited in many ways, and what I am going to emphasize is only an intellectual thing. I don't want to talk about everything at the same time. Let's take a small piece, an intellectual thing.
No government has the right to decide on the truth of scientific principles, nor to prescribe in any way the character of the questions investigated. Neither may a government determine the aesthetic value of artistic creations, nor limit the forms of literacy or artistic expression. Nor should it pronounce on the validity of economic, historic, religious, or philosophical doctrines. Instead it has a duty to its citizens to maintain the freedom, to let those citizens contribute to the further adventure and the development of the human race.
-Richard Feynman

Commodities Watch

Auro loquente omnis oratio inanis est

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You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.
-R. Buckminster Fuller

Ubuntu is an ancient African word meaning 'humanity to others'. It also means 'I am what I am because of who we all are'. The Ubuntu operating system brings the spirit of Ubuntu to the world of computers.

The open society, the unrestricted access to knowledge, the unplanned and uninhibited association of men for its furtherance - these are what may make a vast, complex, ever growing, ever changing, ever more specialized and expert technological world, nevertheless a world of human community.
-J. Robert Oppenheimer

There is perhaps no better demonstration of the folly of human conceits than this distant image of our tiny world. To me, it underscores our responsibility to deal more kindly with one another, and to preserve and cherish the pale blue dot, the only home we've ever known.
-Carl Sagan

I believe that it would be worth trying to learn something about the world even if in trying to do so we should merely learn that we do not know much... It might be well for all of us to remember that, while differing widely in the various little bits we know, in our infinite ignorance we are all equal.
-Karl Popper

Inflation is a twisted magnifying lens through which everything is confused, distorted, and out of focus, so that few men are any longer able to see realities in their true proportions. Yet the ardor for inflation never dies. It would almost seem as if no country is capable of profiting from the experience of another and no generation of learning from the sufferings of its forbears. Each generation and country follows the same mirage. Each grasps for the same Dead Sea fruit that turns to dust and ashes in its mouth. For it is the nature of inflation to give birth to a thousand illusions.-Henry Hazlitt

The only way to avert the onset of the depression-adjustment process is to continue inflating money and credit. For only continual doses of new money on the credit market will keep the boom going and the new stages profitable. Furthermore, only ever increasing doses can step up the boom, can lower interest rates further, and expand the production structure, for as the prices rise, more and more money will be needed to perform the same amount of work. Once the credit expansion stops, the market ratios are reestablished, and the seemingly glorious new investments turn out to be malinvestments, built on a foundation of sand.-Murray N. Rothbard

There is no means of avoiding the final collapse of a boom expansion brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.-Ludwig von Mises

No central bank can, by the mere exercise of its credit-granting power, make something out of nothing, or save other banks from the disastrous consequences of their past policy. When a central bank does so it merely tends to make a bad matter worse.-Henry Parker Willis

It is beyond belief that we know so little about how people get rich or poor, about how it is they come to dwell in comfort and health or die in penury and disease. Financial markets are the machines in which much of human welfare is decided; yet we know more about how our car engines work than about how our global financial system functions. We lurch from crisis to crisis. In a networked world, mayhem in one market spreads instantaneously to all others—and we have only the vaguest of notions how this happens, or how to regulate it. So limited is our knowledge that we resort, not to science, but to shamans. We place control of the world's largest economy in the hands of a few elderly men, the central bankers.-Benoît B. Mandelbrot

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.-Alan Greenspan

If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer;Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose;In the long run, we are all dead.*When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease ... But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.-John Maynard Keynes

The gods did not reveal, from the beginning,
All things to us, but in the course of time
Through seeking we may learn and know things better.
But as for certain truth, no man has known it,
Nor shall he know it, neither of the gods
Nor yet of all the things of which I speak.
For even if by chance he were to utter
The final truth, he would himself not know it:
For all is but a woven web of guesses.
-Xenophanes